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Friday, July 11, 2008

I want to get away, I want to fly away

I'm sure everyone is aware of the affects high oil prices are having on everything, with costs rising rapidly these past several months. One of the many industries effected by this are the airlines who are having to raise ticket prices, cut flights and even come up with creative fees to make up the difference. Having just come back from Hawaii, we couldn't help but notice that had we not booked several months ago, our tickets would have almost doubled.

Anyway, the other day my lovely wife got an e-mail from Hawaiian Airlines who were sending a letter to consumers signed by most of the major airlines wherein they tried to explain their rising costs. But what I found most interesting was it wasn't just your generic "due to the rising prices of blah blah blah we are forced to unfortunately raise our blah blah blah". It went further by explaining WHY oil prices are rising (speculators) and how they are basically driving up the costs artificially.

The official party line of the oil companies is the increased usage being the culprit and, yes, that is true, too. But unless China, India, et al have suddenly added thousands of new factories and millions of new cars on their roads in just the past few months, it wouldn't explain the rapid upward spiral of just recently.

Okay, enough of my rambling. Here is the letter:

An Open letter to All Airline Customers:

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now. For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs. Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper. The nation needs to pull together to reform the oil markets and solve this growing problem.We need your help. Get more information and contact Congress by visiting http://www.stopoilspeculationnow.com/.

I'm sure none of this is big news or a surprise to anyone here, but I thought this would be useful to put up, if for anything the link they give for a place for citizens to find information on how to contact their congressmen (and women) and hopefully get them to slide out of their personal oil lobbyist's pockets and care a wee bit more for the common good of the country and its people.